By Russ Wiles | Arizona Republic
Two of Arizona’s supermarket giants plan to combine forces in a deal affecting more than 250 stores and in excess of 35,000 workers around the state.
A merger also would mean that just one company would control nearly half of the market for grocery stores in Arizona. There’s a greater store overlap here than in many other states, which could raise anticompetitive concerns for regulators.
Kroger, which operates Fry’s Food & Drug and other brands, said it will purchase Albertsons Cos. for $24.6 billion in a transaction announced Oct. 14 and expected to close in 2024. Albertsons operates Albertsons, Safeway and other grocery brands.
Both companies rank among the state’s largest nongovernmental employers. Kroger ranked fourth overall in this year’s Republic 100 report with more than 21,000 workers in Arizona, while Albertsons placed tied for sixth with 14,500.
“Getting the FTC’s clearance on this merger will be a challenge. However, here’s another example where the plan includes a potential solution to alleviate the FTC’s competition concerns i.e., a divestiture of over 300 stores. While the FTC is unlikely to view this as a “slam dunk”, this is a plausible solution and one the FTC cannot ignore.”
Shruti Gurudanti, Rose Law Group partner Director of Corporate Transactions